Post-poll rally spurs airline stock; add Rs 1,600 cr in Mcap

PTIMay 24, 2009, 12.52pm IST

NEW DELHI: With the stock market going into a frenzy following the election results, airline shares emerged as one of the major gainers, just three of them adding Rs 1,600 crore to their market capitalisation in a week.

The three listed airlines, Naresh Goyal-led Jet Airways, Vijay Mallya-promoted Kingfisher and low-cost carrier Spicejet -- saw a combined Rs 1,600-crore surge in its market capitalisation in one week, as investors were upbeat that the Government would now pace up the reform process in the sector to ease pressure on the loss-incurring carriers.

"Aviation stocks are mainly in the mid-cap segment and have cashed-in from the current market rally. They are expecting some reform in the sector. As the companies are going in for fare cuts, it shows they are in a competitive business platform," SMC Global Vice-President Rajesh Jain said.

At the end of trade on Friday, valuation of Spicejet was at Rs 523.25 crore, a gain of Rs 180.76 crore during the week.

Marketmen feel expectations that the new Government will relax foreign investment rules for the sector and airport modernisation plans would get a boost, propelled investor sentiment during the week.